"Gary Bode has just completed our tax returns for the first time and I am totally satisfied with his level of service. He has been very attentive, asked all the right questions, and not only fixed some problems from our previous accountant, but also set us up for future success through a thorough and professional analysis of our corporate structure in conjunction with several personal variables.Gary Bode, CPA: cash flow is the heartbeat of your business! For a free phone consult call 399-2705.
Any cash flow CPA knows cash is king. Cash flows into your business, cash flows out of your business, and the timing thereof is the heart beat of your company. CPAs call it cash flow management, but it is really cash flow prediction.
Use your Bookkeeping
The rewards of timely and accurate bookkeeping are enormous. If you’re not using an accounting software program, like QuickBooks, start doing so. If you’re having problems with existing software, consider getting a tune up with a QuickBooks CPA.
Two reports are vital; Accounts Receivable and Accounts Payable. Weekly examination is prudent. The drill down feature of QuickBooks, where you can click on a category to see the underlying transactions, makes these reports seem like a space craft compared to the manual process used 15 years ago.
Budgeting
A budget integrates accounts receivable and accounts payable reports, usually in a format that is intuitively obvious to the owner. Budgets need to be updated regularly. Evaluate variances between the expected cash flow and actual cash flow to continually refine your grasp on the budgeting process. Cash flow CPAs usually export QuickBooks reports into Excel for this purpose.
Cash Flow Statement
The owner should understand all the Financial Statements. If your CPA can’t help you with that, find someone who can. If the Financial Statements are sloppy, find a CPA who’ll get them into shape. Truly, within a half hour or so, anyone can understand their own Financial Statements. Remember, for internal use, these statements can be formatted in any way that makes sense to you. Remember your bankers and investors use the Financial Statements to evaluate your business. To deal with these folks successfully, you should understand the numbers in your business better than they do.
Most small businesses only produce the Income Statement and Balance Sheet. Cash flow CPAs also produce the Cash Flow Statement, a vital managerial tool in my opinion. This report reconciles how the business got from the Balance Sheet figures on date one to the Balance Sheet figures on date two.
Understand your Personal Finances and how they Integrate with the Business
Folks should understand what their personal monthly nut is, e.g., what money they require to support their home, utilities, food, etc. Further sophistication pre-defines how excess funds might be used, e.g., pre-paying the mortgage, retirement funding, etc. Prudence also dictates what expenses can be delayed or eliminated if necessary.
Most small business owners derive their entire income from the business. So, how much does the business need to make to support its monthly nut and then generate your monthly nut?
Monthly Expenses are Easy but what about Irregular Expenses
Everyone understands the monthly mortgage payment. But what about, say, the balloon payment due in eight months on an inventory loan. Well, there are various budget methods to deal with this. At the very least, even a casual budgeting process would keep the liability in mind, even if the expected re-payment process is nebulous.
I’m a Wilmington NC CPA who understands small business cash flow. I know my success depends on your success. Please read any of the hundreds of posts on this website to get a feel for what an interested CPA can do for your business. Our virtual office supports long distance clients; so if you like what you read, you can still use us even if you’re not lucky enough to live in Wilmington! 
Call (910) 399-2705 for a free phone consult.
